15) Assume that goods X and Y are substitutes and are produced in perfectly competitive markets. All else constant, in the short run, a decrease in the supply of good X would cause what to happen FIRST?:

A) a decrease in supply of good Y. B) an increase in the supply of good Y.

C) an increase in the demand for good Y. D) a decrease in the demand for good Y.

15. ________

16) All of the following are possible characteristics of a monopoly except:

A) there is a single firm. B) the firm produces a unique product.

C) the firm is a price taker. D) the existence of some advertising.

16._________

17) Suppose a monopolist is producing a level of output such that MR > MC. What should the firm do to maximize its profits?

A) The firm should increase output.

B) The firm should do nothing it wants to maximize the difference between MR and MC in order to maximize its profits.

C) The firm should increase price.

D) The firm should hire less labor.

17. ________

18) Which of the following barriers to entry is most likely to result in the creation of new products and production processes?

A) Ownership of an essential raw material.

B) Patents.

C) Significant economies of scale.

D) Licenses.

18. ________

19) The term "network externality" refers to a barrier to entry that exists because:

A) a group of firms has divided the market into interconnected shares controlled by each firm.

B) consumers are unable to network, i.e., cooperate, with each other to control market price.

C) several firms are able to network with each other and control the market.

D) the value of the product to a consumer depends on the number of consumers using the product.

19. ________

20) Which of the following is the best example of a monopolistically competitive market?

A) The wheat market. B) The electricity market.

C) The market for automobiles. D) The restaurant market

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